Taxi insurance is legally required commercial motor cover for drivers carrying passengers for hire or reward, protecting you, your vehicle and your passengers while ensuring you meet licensing rules for private hire or public hire work across the UK.
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Taxi insurance, also known as private hire or public hire insurance, is commercial motor cover for vehicles used to carry passengers for hire or reward. It protects you as the driver, your vehicle and your passengers if an accident, theft or damage occurs while you’re working.
The UK taxi and private hire sector continues to grow. Government data shows that there were 313,000 licensed taxis and private hire vehicles (PHVs) in England as of April 2024, an 8.2% annual increase. There were also 381,092 licensed drivers, a 10% annual increase.
At the same time, increases in theft and repair costs have impacted premiums. UK motor insurers paid out a record £11.7 billion in 2024 as claims payouts surged by 17% compared to 2023. Vehicle repair costs alone totalled £7.7 billion, an annual increase of £1.5 billion.
This guide explains what taxi insurance covers, who needs it, the difference between private and public hire policies, typical costs and how to find the right cover for your work.
Here is a quick overview of what taxi insurance provides and the key points to understand.
Taxi insurance is legally required if you carry passengers for hire or reward. Standard car policies exclude this use, and driving without proper cover can lead to penalties and licence issues.
Policies cover third-party injury and property damage, with the option to add comprehensive cover for your own vehicle. Passenger liability protects you if a passenger is injured while entering, travelling in or exiting your taxi.
Private hire insurance applies to pre-booked journeys only. Public hire insurance covers rank work and street hails. Using the wrong type can invalidate claims.
Local authorities require evidence of appropriate insurance before issuing or renewing taxi or PHV licences.
Annual ranges can differ considerably though, often between £1,500 and £3,500 depending on age, location, vehicle, driving experience, and claims history. Some providers quote around £180 to £200 for a 30-day private hire policy and around £1,600 to £1,800 for annual cover for drivers with clean records.
Other published averages for 2025 show prices near £158 for a 30-day policy and around £1,450 for annual cover.
If you run multiple vehicles, fleet insurance can be more cost-effective. Most insurers offer small-fleet options starting from two or three vehicles.
Common extras include breakdown cover, windscreen cover, legal expenses, public liability, employer’s liability and guaranteed asset protection for financed vehicles.
Paying annually can reduce overall cost, though it may create cash flow pressure.
With the right taxi insurance in place, you can meet licensing requirements and protect your livelihood if something unexpected happens.
Taxi insurance is commercial motor cover for vehicles used to carry passengers for hire or reward. It provides protection when you’re transporting paying passengers, whether through pre-booked journeys, rank work, street hails or contracted services.
Standard private car insurance does not cover taxi or PHV use, so dedicated commercial cover is required for licensing and for valid claims.
Several types of drivers and operators need taxi insurance:
Local authorities and Transport for London require proof of the correct hire-or-reward insurance before approving or renewing a taxi or private hire vehicle licence. Policies must match your licence category, cover your approved operating area, meet your licensing authority’s minimum insurance conditions and align with any vehicle requirements that apply to your taxi or PHV.
If licensing deadlines or annual premium payments create cash flow pressure, iwoca offers flexible business loans. You can borrow what you need, repay early with no fees and only pay interest for the time you use the funds.
Yes. Taxi insurance is mandatory for anyone carrying passengers for hire or reward. Standard private car policies do not cover taxi or PHV use, and any journey undertaken without the correct hire-or-reward insurance would be uninsured.
Driving without valid taxi insurance can lead to penalties, vehicle seizure and licence suspension. Local authorities won’t grant or renew a taxi or private hire vehicle licence without proof of appropriate cover.
Your insurance must match the type of licence you hold. Private hire insurance applies to pre-booked journeys only, such as bookings made through apps, dispatch offices or phone requests. Private hire vehicles cannot legally pick up passengers from the street or wait at taxi ranks.
Public hire insurance applies to vehicles that can be hailed from the street or operate from designated ranks, such as hackney carriages. It covers both immediate hire and pre-booked work. Because public hire vehicles face different risks, the cover is broader and premiums are usually higher.
If you use a private-hire insurance policy to carry out public-hire work, you may be uninsured, and insurers may refuse claims. Licensing authorities typically require valid, hire-or-reward, or public-hire, cover at all times to maintain licensing.
Taxi insurance applies to any vehicle that is licensed to carry passengers for hire or reward.
These include:
Some insurers also cover larger seating-capacity vehicles, usually up to eight passenger seats, provided they meet local authority licensing requirements.
Vehicle eligibility depends on the rules set by your licensing authority, including age limits, accessibility standards, approved modifications and any additional conditions for hackney carriages or private hire vehicles. Insurers will also assess the vehicle’s value, engine size, mileage and any specialist adaptations when calculating a premium.
Taxi insurance comes in different forms depending on the work you do, your vehicle, your licensing category, and whether you operate alone or as part of a fleet.
Cover levels
Taxi insurance is available in three main cover levels, each offering a different level of protection.
These levels of cover determine how much financial protection you have if something goes wrong.
Policy formats
Taxi insurance can be arranged in different policy formats depending on how you operate.
The format you choose depends on how you operate and how many people drive your vehicle.
Use classes
Taxi insurance is divided into use classes that reflect the type of work you do.
Insurers use these categories to match cover to the type of work you are licensed to do.
Optional add-ons
Common extras include breakdown cover, windscreen cover, legal expenses insurance, public liability, employer’s liability and GAP cover. These add-ons help tailor your policy to the risks you face day-to-day.
Choosing the right type of taxi insurance ensures you’re properly protected and compliant with licensing rules.
Taxi insurance includes several types of protection designed to keep you and your passengers safe while meeting licensing requirements.
Core cover
Taxi policies include essential protection for incidents that may occur during passenger work.
These elements form the basic foundation of a taxi insurance policy.
Vehicle-related cover
Additional protection applies to damage or disruption involving your vehicle itself.
This helps keep your vehicle on the road and reduces downtime.
Other protection
Some policies offer wider cover for risks connected to your business activities.
These options help you meet additional legal obligations and protect your business from unexpected costs.
Checking your policy wording carefully ensures you have the right mix of cover for the work you do.
Taxi insurance costs vary across the UK because premiums depend on risk, location, vehicle type and the type of taxi work you do.
Published examples from taxi insurers and brokers show annual premiums ranging from £1,500 to £3,500. Short-term and 30-day policies are also common.
Pricing examples include the following:
These prices are indicative only, as final quotes vary by insurer and local licensing requirements.
Pricing drivers
Insurers take a wide range of factors into account when calculating taxi insurance premiums.
Chief among these are the following.
Other factors that can influence your final premium include specialist vehicle adaptations such as wheelchair-accessible features, if you choose named-driver or any-driver cover, and if your policy needs to include specific work such as school contracts or executive hire.
Additionally, public hire drivers and those working in busier urban areas often pay more because of higher road density and claim frequency.
Ways to save
Here are seven ways that you may be able to reduce the cost of cover.
These steps can help reduce risk in the eyes of insurers.
Exploring a range of specialist taxi policies can help you find cover that matches your licensing requirements and day-to-day risks without paying more than you need to.
If paying annually is cheaper but the upfront cost is difficult to manage, iwoca can help cover the payment and keep your cash free for fuel and licence fees.
Comparing taxi insurance quotes is easier when you prepare the right information and assess each policy on a like-for-like basis.
Prepare your details
Insurers need accurate information before providing a quote.
Have the following ready:
Providing clear and consistent information helps avoid discrepancies between quotes.
Check policies like-for-like
Taxi policies vary widely, so it’s important to compare them on equal terms.
Look at the following nine factors when you’re benchmarking.
Reviewing these details helps you understand the real differences behind each price.
When to use specialist brokers
Specialist taxi brokers can be helpful if you have a more complex profile, operate a multi-driver fleet or work in public hire.
They can source policies tailored to your licensing authority’s requirements and explain any conditions that may affect your cover.
Keep proof of cover
Once insured, keep your insurance certificate and policy schedule available for licensing inspections, and check that your details have been updated on the Motor Insurance Database (MID) if required.
Preparing the right information and reviewing policies carefully makes it easier to find taxi insurance that fits your work and meets local licensing rules.
Choosing the right taxi insurance means matching your policy to the way you work and the specific risks you face.
Match cover to your work mix
Different types of taxi work carry different requirements. Airport runs may need extended territorial cover and stronger breakdown support, while night-time city work can increase accident and incident risks.
Rank work requires public hire insurance, which is usually more expensive than private hire policies used for pre-booked jobs. School contracts may involve additional checks or policy conditions, and wheelchair-accessible work often requires specialist cover for adapted vehicles.
Aligning your policy to your day-to-day work helps ensure you have the right level of protection.
Consider dashcams and telematics
Dashcams can help defend against fraudulent claims and provide valuable evidence if an incident occurs. Some insurers offer lower premiums for vehicles equipped with them.
Telematics policies monitor driving behaviour and can reduce costs for drivers who demonstrate safe habits over time. Both tools can improve safety and help manage premiums.
Review annually
Your insurance needs will change as your business evolves.
Review your cover each year for vehicle upgrades or replacements, adding or removing drivers, changes to shift patterns or working hours, improvements in your claims history and any new licensing requirements.
Regular reviews help ensure your policy continues to reflect how you operate and what you need to stay compliant.
If you'd like to check your eligibility for business funding to cover insurance premiums or other operating costs, and receive a decision within 24 hours, you can apply here.
